Home / Companies / News /  Bombay HC extends status quo on FTIL-NSEL draft merger order

Mumbai: A division bench of the Bombay high court on Monday extended the status quo on the draft order which proposed the merger of the National Spot Exchange Ltd (NSEL) with Financial Technologies (India) Ltd (FTIL) till 4 February.

Earlier on 27 November, the court has directed the government to maintain status quo on the 21 October draft order, which was challenged by FTIL.

The high court on Monday also issued contempt notices against some of the investors.

A bench comprising justices V.M. Kanade and Revati Mohite Dere said they had received letters from certain section of investors including the NSEL Investors Forum on 3 December asking Kanade to recuse himself from hearing the case, as his son Vishal Kanade has defended one of the directors of PD Agroprocessors Pvt. Ltd , which defaulted on dues to NSEL.

Kanade said his son had only appeared for a nominee director of PD Agroprocessors who had nothing to do with the NSEL crisis.

“An attempt is made by some persons to obstruct administration of justice. The status quo was ordered by the court before 60 days of the draft ordered got over. No one benefited from this status quo order. If any one has any doubt about the fairness of this court, then I don’t want to hear the case," Kanade said on Monday.

“Obviously the investors who wrote the letter knew about my son’s involvement in the case when I heard the matter on 27 December," he said. “Why did they not raise this issue then?"

None of the investors who wrote the letters to Kanade and the chief justice of the Bombay high court appeared in court when summoned by the court.

Abhishek Manu Singhvi, a lawyer representing FTIL, and Iqbal Chagla, the counsel representing the Forward Markets Commission (FMC), condemned the letter sent by investors accusing the court of bias.

On 21 October, the government had issued a draft order suggesting that FTIL be merged with NSEL in public interest. The merger would mean that FTIL would assume all the liabilities of the commodity bourse and become party to all the contracts and agreements entered into by NSEL. The government said the order would be finalized after comments and feedback from stakeholders and the public.

FTIL owns 99.99% in NSEL, on which trading was suspended after a 5,574.35 crore swindle came to light in July 2013.

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